Japan Unveils ￥21 Trillion Economic Stimulus Package, with Over Half Allocated to Inflation Relief

November 21st - The Cabinet of Japanese Prime Minister Sanae Takaichi approved the largest supplementary budget since the pandemic broke out. Funds will be disbursed through a comprehensive plan to ease voter dissatisfaction. However, this move may raise concerns among investors closely monitoring Japan's fiscal situation. It has led to the yen falling to a 10-month low and the ultra-long-term government bond yield surging to a historical high. The Japanese Cabinet Office stated on Friday that this stimulus plan includes ¥17.7 trillion (approximately $112 billion) in general account spending. These expenditures are likely to be provided through a supplementary budget, representing a 27% increase compared to the scale introduced by its predecessor a year ago. The overall plan has a scale of ¥21.3 trillion, covering various aspects from price relief to targeted sector investment support. The large scale of price relief funds shows Sanae Takaichi's determination to address persistent inflation. Inflation has aggravated voter dissatisfaction and led to the ousting of her predecessor. Data released on Friday showed that Japan's key price index has remained above the central bank's 2% target level for 43 consecutive months, which is the longest streak since 1992. The Japanese Cabinet plans to approve a supplementary budget bill on November 28th to provide funding for this plan and aims to obtain parliamentary approval by the end of the year. (Jin10)